Thursday's session on Dalal Street was important from a technical perspective, and domestic equities continued to correct from higher levels to end the day on a negative note.

After a flat start, Nifty inched higher and traded with modest gains by afternoon.

However, the second half of the session saw the index pare its gains.

Nifty came off the high point, slipped into the red and went on to end near the low point of the day.

The session saw the headline index ended with a modest loss of 45.05 points, or 0.37 per cent. On Monday, Nifty will open after a long weekend as Friday was a trading holiday on account of Mahashivratri.

The market will see a tepid start to the session as it adjusts to Friday's trends in global markets.

Apart from that, Nifty has faced resistance in the falling trend line that joins the lower top, drawn from the high of 12,430 level.

The index has also faced resistance at its 50-DMA, which currently stands at 12,141. On Monday, Nifty will face resistance at 12,105 and 12,140 levels, while supports will come in at 12,040 and 12,000 levels. The Relative Strength Index (RSI) on the daily chart stands at 49.65; it continues to stay neutral without showing any divergence against price.

While the daily MACD remains bullish and trades above the signal line, the deceleration of momentum is evident from the slope of the histogram.

Apart from a Black Body that emerged on the candles, no other formations were noticed.

ET CONTRIBUTORSPattern Analysis showed Thursday’s session has almost validated the lower top that occurred near 12,230 level.

The validation is evident as Nifty faced resistance at the falling trend line that begins from the high of 12,430 and subsequently joins the lower top.

Nifty also faces resistance at its 50-DMA on a closing basis.

There are increased possibilities of Nifty testing its short-term 20-DMA, which is currently placed at 12,042.

In the event of any incremental weakness, Nifty would be prone to violating a few crucial levels on the weekly charts.

On the other side, all up-moves, if any, are likely to get sold into; and no meaningful upsides will be seen unless Nifty moves past the 12,230 level convincingly.

While continuing to utilize all technical pullbacks to protect profit, a cautious view is advised for the day. Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research - Advisory Services, Vadodara.

He can be reached at This email address is being protected from spambots.

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